Achillion Pharmaceuticals HCV pipeline suddenly looking attractive...

Posted 8/29/12 on Business Week.com. Achillion Pharmaceuticals, once regarded as an also ran by Big Pharma suddenly looks sexy again as clinical holds and pipeline failures stymie drug development with Idenix and BMS. Rumors of a takeover has made Achillion stock surge in the past couple of days. The HCV drug development space continues to be one of the most dynamic in pharma, there is definitely no shortage of spills and thrills. 

Achillion Deal Looming as Hepatitis Drugs Fail: Real M&A

By Ryan Flinn and Will Robinson on August 29, 2012

Achillion Pharmaceuticals Inc. (ACHN), the developer of hepatitis C treatments that was passed over by potential acquirers in the last year, is poised to draw renewed interest after setbacks by rival drugmakers.

Bristol-Myers Squibb Co. (BMY) last week said it was abandoning an experimental hepatitis C pill it obtained through its February purchase of Inhibitex Inc. after one patient died and others were hospitalized while taking the drug in a study. This week, Idenix Pharmaceuticals Inc. said U.S. regulators halted its study of a similar therapy, marking the second hold on clinical trials for the company this month.

With the market for new hepatitis C treatments projected to reach $20 billion by 2020 and Achillion facing no delays in two drugs under development, Piper Jaffray Cos. and William Blair & Co. say the $481 million company could gain fresh attention as a takeover candidate for Merck & Co. (MRK), Roche (ROG) Holding AG and Vertex Pharmaceuticals Inc. (VRTX) A suitor could pay a premium of as much as 79 percent to Achillion’s stock price and still acquire the New Haven, Connecticut-based company for less than its peak market value earlier this year, when takeovers and merger speculation spurred a surge in hepatitis C drugmakers’ shares.

“The frenzy has been taken out of the space, but I still think Achillion is very attractive” because its therapies have the potential to be the best of their type, Ted Tenthoff, a New York-based analyst for Piper Jaffray, said in a telephone interview. “We expect the wave of consolidation to continue. Achillion is clearly a target.”

Drug Development
Joe Truitt, Achillion’s chief commercial officer, said it wasn’t appropriate to comment on the company’s development plans, including the possibility of a takeover.

“We’ll make the best strategic options as they come to us, but for right now, we’re developing our drugs and getting them into combinations and making them available to patients,” Truitt said in a phone interview.

Today, shares of Achillion rose 3.5 percent to $6.86 at 9:45 a.m. in New York, the second-biggest gain among 116 stocks in the Nasdaq Biotechnology Index.

Hepatitis C is a viral infection that can cause liver damage and is estimated to affect 180 million people worldwide, according to the National Institutes of Health. Rising deaths among so-called baby boomers from the infection prompted U.S. health officials to declare in May that all of those born from 1946 to 1964 are at risk and should be tested.

Achillion is among several companies racing to develop hepatitis C cures that would replace the standard year-long injectable treatment that can cause flu-like symptoms.

Four Classes
There are four new classes of drugs under development to cure hepatitis C. Each work in different ways to stop the virus from replicating, and can be effective against one or several subtypes of the disease.

Drugmakers such as Abbott Laboratories (ABT), Achillion, Bristol- Myers, Gilead Sciences Inc. (GILD), Merck and Vertex have been testing these therapies, either alone or together, with varying degrees of success. The promise of a market that Achillion Chief Executive Officer Michael Kishbauch estimates will grow to $20 billion by 2020 spurred at least three acquisitions since October.

The biggest deal was Gilead’s $10.8 billion acquisition of Pharmasset Inc., announced in November, which came a month after Roche agreed to buy Anadys Pharmaceuticals Inc. for about $230 million. Bristol-Myers followed in January by announcing its $2.5 billion purchase of Inhibitex.

Fresh Look
Achillion’s Kishbauch said in November that the company was in “advanced discussions” with potential partners or acquirers. Its shares then reached a five-year high of $12.38 in February on takeover speculation before falling (ACHN) 46 percent since then as no deal materialized.

Now, with Bristol-Myers stopping development of the drug it bought from Inhibitex, and Idenix (IDIX) halting testing of a similar therapy, Achillion could attract a fresh look from companies seeking hepatitis treatments to use on their own or in combination with their existing therapies, said Liisa Bayko, a Chicago-based analyst with JMP Securities LLC.

Achillion is testing two types of drugs. By combining several classes of these new hepatitis C drugs, doctors may be able to limit the virus’ ability to infect, mimicking the strategy that a decade earlier helped turn HIV from a killer disease to a controlled one.

During the first quarter, Achillion will be reporting on how effective its two therapies work in combination. Good data could entice competitors to bid, Bayko said.

‘Well-Positioned’
“By the first quarter of next year, we could be a very different company,” Achillion’s Truitt said. “If that combination data comes through, then we really have a commercially viable, competitive combination that will put everybody on notice.”

“We’re pretty optimistic for Achillion,” Bayko said in a phone interview. “They’ll be well-positioned to be a candidate to be taken out, because right now, there are very few options if you want to get involved in hep C, in terms of combinations that are more advanced that are still in clinical development.”

Bayko said that while she expects a suitor to wait for the data on the drugs before making an offer, Achillion still could fetch as much as $10 a share if a company bid for it now, 51 percent more than its closing price yesterday.

Piper Jaffray’s Tenthoff said Achillion could lure suitors such as Merck, Roche and Vertex as they seek to compete against Gilead, which is seen by analysts as having the most promising hepatitis C drug. Gilead is poised to start testing two of its therapies together in a single pill this year, putting it on track to request U.S. regulatory approval for the drug in 2014.

Gilead Bid
Ronald Rogers, a spokesman for Merck, said the company doesn’t comment on speculation when asked whether the Whitehouse Station, New Jersey-based drugmaker was interested in Achillion, while an e-mail to Basel, Switzerland-based Roche’s media relations office wasn’t returned. Megan Pace, a spokeswoman for Cambridge, Massachusetts-based Vertex, declined to comment.

Even Gilead could seek to acquire Achillion as a way to remove a potential competitor and bolster its position, said Peter Kolchinsky, co-founder and general partner at RA Capital Management LLC, which oversees $300 million, including Achillion shares.

“Gilead could solidify its supremacy if it had Achillion’s drugs, each best in its respective class based on what we know so far,” Kolchinsky said in an interview. “Acquiring Achillion would also be a wise defensive move for Gilead, keeping it from falling into a competitor’s hands or from becoming an independent low-cost competitor.”

Safety Concerns
Cara Miller, a spokeswoman for Foster City, California- based Gilead, said the company (GILD) doesn’t comment on market speculation.

Brian Skorney, an analyst with Brean Murray Carret & Co. in New York, says Achillion won’t be a takeover target soon because it has “a lot more to prove” with clinical data next year. Other companies that developed hepatitis C treatments like Pharmasset and Inhibitex proved their drugs were effective before they were bought, and the only remaining question about their products was safety, he said.

The safety problems that challenged the drug Bristol-Myers bought from Inhibitex and the regulatory holds that Idenix faces show how much risk is still left in the market for hepatitis C treatments, said Les Funtleyder, a fund manager focused on the health-care industry at New York-based Poliwogg.

“What’s that phrase, ‘Once burned, twice shy?’” Funtleyder said in a phone call. “If someone was to repeat what happened to Bristol, shareholders would start to ask questions about management’s judgment.”

Cheaper Now
Still, after the drop in Achillion’s stock this year, a buyer would be taking on the risk of the therapies potentially failing at a lower price tag.

During the past 12 months, acquirers that announced deals for biomedical companies paid 65 percent more than the target’s average 20-day stock price in transactions greater than $500 million, according to data compiled by Bloomberg. A bidder for Achillion could offer a premium of as much 79 percent to yesterday’s stock price and still get the drugmaker for less than its record market value of $863 million in February.

The market for treating the viral infection is too big to be dominated by Gilead alone, so large drugmakers may have the appetite to acquire a company such as Idenix or Achillion once they produce sufficient data on the safety and effectiveness of their drugs, said Y. Katherine Xu, a New York-based analyst at William Blair. Kelly Barry, a spokeswoman for Cambridge, Massachusetts-based Idenix, didn’t return a voicemail message and e-mail sent after business hours about whether the company has been approached by suitors.

“Both Idenix and Achillion, their strategy is to sell themselves,” Xu said. “Timeline-wise, these two used to be similar, but now Achillion may be a little bit ahead.”

To contact the reporters on this story: Ryan Flinn in San Francisco at rflinn@bloomberg.net; Will Robinson in New York at wrobinson11@bloomberg.net.

To contact the editors responsible for this story: Sarah Rabil at srabil@bloomberg.net; Reg Gale at rgale5@bloomberg.net.

The Street.com: Rethinking Idenix Pharma in Wake of Bristol's Hep C Blow Up...

Posted 8/6/12 on The Street.com. The Streets's Nathan Sadeghi -Nejad weighs in on the current - and seemingly hyperactive - HCV drug development space. He's right, the last couple of weeks have been a whirlwind of surprises - Novartis giving Idenix the rights to it's HCV drugs back, BMS's BMS-094 seemingly taking it's last breath, Gilead co-formulating it's nuc with it's NS5A inhibitor just to name a few.  BMS has had a rough time of it in the HCV drug development space. It's $885 million purchase of ZymoGenetics with it's Peg Lambda seemed like a great move in 2010, before the advent of the idea of potential interferon-free therapy (I still think Peg Lambda may be a surprise dark horse - I'm still cautious on the potential 'interferon free' except in certain cases), Then consider the $2.5 billion purchase of Inhibitex, whence the doomed BMS-094 nuc came from leaving BMS's NS5A inhibitor without a BMS-owned partner. It's other late-stage HCV drugs aren't much to sneeze at. Ouch. Sadeghi-Nejad makes some other observations (Gilead - yes. Idenix - nuc is too close to BMS-094, maybe a toxicity issue but no safety signals to support. Vertex nuc looks powerful, but too far from market to mean much) that you may or may not agree with. Definitely a good read if you're watching the HCV drug development race.

Rethinking Idenix Pharma in Wake of Bristol's Hep C Blow Up

By Nathan Sadeghi-Nejad - 08/06/12 - 7:00 AM EDT
Tickers in this article: IDIX BMY GILD VRTX

NEW YORK (TheStreet) -- Last week, Bristol-Myers Squibb(BMY) confirmed my previously reported suspicions by abruptly halting a Phase II trial of BMS-094 (formerly INX-189) -- a nucleotide polymerase inhibitor, or "nuc," for the treatment of hepatitis C. One patient in the study experienced major cardiovascular toxicity, forcing Bristol-Myers to stop dosing BMS-094.

The company has provided few follow-up details but it appears as if BMS-094 is dead.

That means Bristol-Myers' $2.5 billion acquisition of Inhibitex (from where BMS-094 originated) has proven to be a complete zero in less than seven months. I'm not sure if that's a mergers-and-acquisition disaster record, but it's probably close.

The demise of BMS-094 has also reshaped the Hep C landscape. Let's review who still stands and where. For some assistance, I turned to John Tucker, a scientific analyst with BioMedTracker, a division of Sagient Research. Tucker recently published an excellent overview on Hep C drugs in development and he's been all over BMS-094 and its implications.

At this point, combining a "nuc" with an NS5A inhibitor and the generic antiviral drug ribavirin seems to be the most promising "all oral" Hep C regimen in clinical development. This makes Bristol-Myers' daclatasvir, an NS5A inhibitor essentially useless on its own. The company's other later-stage hep C drug candidates -- the non-nucleoside polymerase inhibitor BMS-791325 and the protease inhibitor asunaprevir -- have only modest efficacy or toxicity issues, or both.

Bristol-Myers may continue to beg but I'm convinced Gilead Sciences(GILD) has no interest in a daclatasvir partnership. As I noted recently, Gilead's nuc-NS5A combination -- GS-7977 and GS-5885 -- has made rapid clinical progress and will start pivotal trials this year. In sum, the BMS-094 blowup leaves Bristol-Myers up a proverbial creek in Hep C. Although this failure has little long-term financial impact, Bristol-Myers' apparent inability to foresee this compound's risks raises concerns about the company's R&D and business development capabilities.

Gilead emerges a big winner. I have long believed Gilead would be first to market with an all-oral Hep C regimen, but Bristol-Myers has handed the company a much bigger lead. (I also still doubt the size of the commercial market for Hep C, but that's another issue.)

I initially considered Idenix Pharmaceuticals(IDIX) and its nuc IDX-184 a winner emerging from the BMS-094 blowup. Now, I'm less sure.

IDX-184 has a chemical structure that is similar to both BMS-094 and Pharmasset's PSI-938, another Hep C nuc that was killed off by toxicity problems last year. More specifically, the active moiety of IDX-184 -- the part of the molecule that makes the drug work -- appears to be similar to the active moieties of both BMS-094 and PSI-938. That could be a big problem.

Chemists often attach nonessential atoms to a drug candidate in an attempt to change the compound's overall physiological behavior. As the drug is metabolized in the body, those byproducts are cleaved and the working core of the drug -- the active moiety -- is unveiled.

The byproducts are usually innocuous, but not always. For example, it's not clear whether the side effects that killed BMS-094 were caused by the active moiety or by 1-naphthol, a toxic metabolite of the drug. Similarly, PSI-938's fatal flaw remains unclear. This worries me, and it should worry Idenix bulls.

Idenix does have a very reasonable defense. Management contends IDX-184 is nearly entirely targeted to the liver and metabolized poorly in other cell types. Further, IDX-184 seems to be more slowly metabolized by the liver than BMS-094. These factors certainly lessen the risk of toxicity. Thus far, Idenix has treated roughly 60 patients for 12 weeks with IDX-184 and observed no safety signals, including no cardiovascular side effects.

That's encouraging, but I would prefer to overpay for Idenix after there are more data on IDX-184. I would reduce or eliminate long exposure to Idenix until the drug's safety has been more completely established.

Two more Idenix red flags that make me cautious: First, Novartis(NVS), Idenix's partner for nearly a decade, ended the relationship last week. I understand that Novartis wasn't much of a collaborator so walking away might actually be a net positive for Idenix. But I still tend to view pharma-biotech breakups as a negative, although in this case a bit less so.

Second, Idenix completed a major secondary offering only two days after the Novartis breakup. Idenix sold 22 million shares at $8.00 per share or 28% below recent highs. Although I generally support equity issuances at management's discretion, the company still had at least $90 million in the bank. Shareholders should feel justifiably frustrated at this seemingly unnecessary rush dilution of the existing investor base. I worry that the timing signals dark clouds on the horizon.

Right before the Bristol-Myers news, Vertex Pharmaceuticals(VRTX) announced impressive early clinical data for ALS-2200, a nucleotide analogue licensed from Alios BioPharma. After seven days of dosing, the eight treated patients showed a median 4.54 log reduction in viral load. That's near complete eradication of virus, for those of you unfamiliar with the logarithmic scale.

Unfortunately for Vertex, ALS-2200 has not cleared any meaningful long-term safety hurdles and the drug remains years behind Gilead's compounds. I would put Vertex on the "watch and wait" list, but that's it.

As I have discussed before, it's hard for me to get excited about the other Hep C players. Abbott(ABT) has a seemingly decent trio of drug candidates in later-stage development, but the impending spin off of AbbVie -- Abbott's pharma business -- makes the new company nearly completely dependent on the multi-blockbuster rheumatoid arthritis drug Humira.

Johnson & Johnson's(JNJ) TMC-435 looks solid but lacks an obvious companion unless the company partners with Gilead or physicians, on their own, decide to combine TMC-435 with Gilead's GS-7977 into an "off label" all-oral Hep C regimen -- an idea that BioMedTracker's Tucker believes is a real possibility. Finally, everyone wants me to like Achillion Pharmaceuticals, but there is no shortage of NS5A or protease inhibitors -- the company has two NS5As and a protease inhibitor -- so I can't get that excited.

Ironically given the longstanding investor skepticism, Gilead appears likely to dominate the Hep C market over the next decade. I still worry the company vastly overpaid for Pharmasset, but that concern will be meaningful only if something goes wrong and investors are looking for a cudgel with which to beat management. Otherwise, it's time for investors to start thinking logically about the real size of the Hep C treatment market. It's going to be hard for any company to make big money if there aren't enough Hep C patients to treat.

Disclosure: Sadeghi has no positions in any of the stocks mentioned in this article.

Guru Focus: Idenix Pharmaceuticals Lagging Behind In Breakthrough Hepatitis C Drug Development

Posted on 7/13/12 on www.gurufocus.com. The author is worried about Idenix's pan-genotype nuc, IDX184. I'm not as worried, but Idenix definitely needs other drugs beside it's own to pair IDX184 with - preferably those well into Phase IIb or Phase III studies.  Those are drugs that are most likely to make it to market first, barring any errant new safety signals that would gum up the works and put pinholes in the dreams of investors everywhere. A good example to follow is Medivr/Janssen's protease inhibitor TMC435. That partnership has done an outstanding job of partnering with every company with a drug that looks hopeful, expanding their status as the 'preferred partner' drug in every combination that looks effective and safe.  On the other hand, we've learned in HIV that a good, potent, well-tolerated nuc (preferably ones with a unique resistance profile) will always come in handy. A good drug never has to worry. Only the company developing it does. 

Idenix Pharmaceuticals Lagging Behind In Breakthrough Hepatitis C Drug Development
July 13, 2012

Idenix Pharmaceuticals (IDIX) is one of the biopharmaceutical companies focused on discovering, developing and commercializing drugs for the treatment of life-threatening human viral diseases such as Hepatitis C. Hepatitis C is a form of liver disease that is passed on from one person to another through contact of bodily fluids. The Hepatitis C virus can severely damage the liver as it is asymptomatic and therefore, the effects are slowly felt over a long period of time. Hepatitis C has the potential to kill if not detected early enough.

It is estimated that 75% to 85% of Hepatitis C infections become chronic, leading to serious liver disease such as cirrhosis and may even causing liver cancer. Researchers at the Centers for Disease Control and Prevention estimate that about 50% of the 3.2 million Americans who have chronic Hepatitis C do not know about it. This is frightening to say the least, given that Hepatitis C is now estimated to be killing more Americans than HIV, the virus that causes AIDS. The Hepatitis C virus has also been found to be more prevalent in the "baby boomer" generation born between 1945 and 1964. This was a time when casual sharing of needles and drug use was the norm. I was floored to discover that the current worldwide figure of persons considered to be living with chronic viral hepatitis stands at between 480 million and 540 million, with approximately 130 million to 170 million of them infected with the Hepatitis C virus.

IDX184 is a pan-genotypic oral nucleotide polymerase inhibitor and Idenix Pharmaceutical’s lead product for the treatment of Hepatitis C. It is Idenix’s belief that the Hepatitis C treatment paradigm will evolve rapidly within the next three to five years as various companies continue to develop direct-acting antivirals (DAAs) from different drug classes. The treatments would potentially reduce the duration of treatment from one year to six months or less, increase the sustained virologic response rates and improve drug tolerability. It would also be extremely convenient as patients would be able to take all the drugs orally. I believe this is significant as the side effects associated with the combination of Interferon and Ribaravin during treatment disqualify many Hepatitis C-infected candidates from undergoing the treatment. Therefore, a breakthrough in this area would be a huge stride for Idenix and has the potential to affect its share price positively. Idenix Pharmaceuticals has also co-developed a Hepatitis B drug candidate, telbivudine, with Norvatis Pharma AG (NVS). The product is commercially sold as Tyzeka®, and Idenix Pharmaceuticals earns royalties from the product sales.

Idenix Pharmaceuticals stock began trading on July 2004 with an initial public offering of 5.8 million shares at $14 per share. On 23 April, 2012 Idenix Pharmaceuticals gained 6.5% to even out at slightly below $9. Earlier in March 2012 the share price had traded at an average of $12. Idenix Pharmaceuticals released its fourth quarter and financial results for the year ending Dec. 31, 2011 in February. Its total revenue was $7 million compared to 10.2 million in the year ending Dec. 31, 2010. The company recorded a net loss of $52 million on Dec. 31, 2011 as compared to $61.6 million on Dec. 31, 2010. The share price seems to fluctuate a lot so if you’re looking to trade in stock it is probably advisable to consider day-trading or swing-trading as compared to making a long-term investment.

Another competitor, Gilead Sciences (GILD) made astronomical progress in April 2012, when a mid-stage clinical trial revealed that a combination of the GS-7977 drug and the antiviral Ribaravin cleared the virus in approximately 88% of the patients. The GS-7977 drug was administered together with Ribaravin, completely eliminating the need for the injectable interferon. Gilead Sciences is the world’s largest HIV drug maker, so this news comes as no surprise.

Gilead’s shares have evened out at an average of $51 after they jumped from about $47 to an average of $53. These developments have clearly placed Gilead Sciences ahead of the pack, and I would not hesitate to recommend trading its shares.

Vertex Pharmaceuticals (VRTX) is also in the process of carrying out a study to evaluate the effectiveness of a Hepatitis C treatment on patients who are not on antiretroviral therapy for HIV versus those who are on a Atripla- or Reyataz-based treatment for HIV. Vertex Pharmaceuticals is carrying out the study in collaboration with Janssen, one of Johnson & Johnson (JNJ)'s pharmaceutical companies. The study is intended to evaluate the safety and tolerability of the Incivek drug combination therapy in patients infected with both the Hepatitis C virus and HIV. The drug is marketed in the U.S. and Canada and is also available in the Far East and Japan.

Vertex Pharmaceuticals stock is trading at an average of $37. January 2012 was a terrible month for Vertex with their share price dipping to $34 after an analyst at Leerink Swann reduced the sales forecast for Incivek from $2.3 billion to $1.5 billion this year, citing recent developments of interferon-free regimens and the possibility of more aggressive developments. There is a great need for Hepatitis C treatment and more so amongst those infected with HIV. If Vertex Pharmaceuticals manages to develop a drug that can be safely used to treat those co-infected with Hepatitis C and HIV then it is safe to say that it will be worth your while to invest in Vertex Pharmaceuticals.

Victrelis, a product of Merck & Co. (MRK), was approved for the U.S. market by the Food and Drug Administration just last year for the treatment of Hepatitis C. It is surprising therefore when I learned from my research that the drug’s effectiveness is lowered when used in combination with some antiretroviral therapy drugs. It’s not all bad news though. Merck recently agreed to pay Endocyte (ECYT) up to $1 billion to develop and commercially market Vintafolide, an experimental cancer drug. Merck will own all the global rights meaning that a surge in sales will push its share price upwards. Merck is currently trading at an average of $28 and its future outlook does not look very promising at the moment.

Abbot Laboratories (ABT)'s main line of business is in the discovery, development, manufacture and sale of a wide range of health care products. Abbot Laboratories released data earlier in April 2012 from a mid-stage clinical trial that indicated combining ABT-450 boosted by an antiviral, Ritonavir, along with Ribaravin and a polymerase inhibitor achieved a 95% cure rate. Deutsche Bank consequently boosted Abbot Laboratories rating to “Buy” in March 2012 with a price target of $70. The share price is currently trading at slightly under $60. I’d say this is pretty close to what analysts at Deutsche Bank projected. Abbot Laboratories is in the process of separating into two healthcare companies by the end of the year, so it is advisable to carry out day trading and keep a close eye on the share price.

Incivek (telaprevir) product labeling revised...

Posted at FDA.gov on 6/26. The FDA revised the product labeling for Incivek. The changes were a combination of DDI, warnings, clinical trial data revisions and corrections. See below for full list of changes. 

Incivek (telaprevir) product labeling revised

The Incivek (telaprevir) product labeling was recently revised to include the following changes:

1. Update the clinical comment for neuroleptic drug pimozide in Section 4 Contraindications to state: "Potential for serious and/or life-threatening adverse reactions such as cardiac arrhythmias"

2. Update Section 5 Warnings and Precautions subsection 5.4 Anemia to state: "Hemoglobin should be monitored prior to and at least at weeks 2, 4, 8 and 12 during INCIVEK combination treatment and as clinically appropriate."

3. Update Section 5 Warnings and Precautions subsection 5.6 Laboratory Tests to state the following: Use of a sensitive real-time RT-PCR assay for monitoring HCV-RNA levels during treatment is recommended. The assay should have a lower limit of HCV-RNA quantification equal to or less than 25 IU per mL and a limit of HCV-RNA detection of approximately 10-15 IU per mL.

4. Update Section 7 Drug Interactions to remove desipramine from Table 5: Established and Other Potentially Significant Interactions. Also added to Section 7 was a statement that no dose adjustment is needed for Incivek when given with either raltegravir or buprenorphine. The corresponding results from the drug-drug interaction trial with raltegravir and buprenorphine are included in Section 12 Pharmacokinetics.

5. Update Section 14 Clinical Studies to include revisions to the definition of sustained virologic response (SVR) and to correct the SVR rates for African American and Cirrhotic subpopulations as follows:

SVR was defined as HCV RNA less than 25 IU per mL at last observation within the SVR visit window (i.e., weeks 32-78 for patients assigned to 24 weeks of treatment and weeks 56-78 for patients assigned to 48 weeks of treatment).

Trial 108 (ADVANCE)

Twenty-six subjects were Black/African Americans. The overall SVR among Black/African American subjects was 62% (16/26). Among these subjects, 35% (9/26) were assigned to 24 weeks of treatment and of those 89% (8/9)achieved SVR.

Twenty-one subjects had cirrhosis at baseline and the overall SVR in these subjects was 71% (15/21). Among subjects with cirrhosis, 43% (9/21)were assigned to 24 weeks of treatment and of those 78% (7/9)achieved SVR.
Trial 111 (ILLUMINATE)

Sixty-one (11%) of subjects had cirrhosis at baseline. Among subjects with cirrhosis, 30 (49%) achieved an eRVR: 18 were randomized to T12/PR24 and 12 to T12/PR48. The SVR rates were 61% (11/18) for the T12/PR24 group and 92% (11/12) for the T12/PR48 group.
Blacks/African Americans comprised 14% (73/540) of trial subjects. Thirty-four (47%) Black/African American subjects achieved an eRVR and were randomized to T12/PR24 or T12/PR48. The respective SVR rates were 88% (15/17) and 88% (15/17), compared to 92% (244/266) for Caucasians among randomized subjects.
Trial C216

Twenty-six percent (139/530) of INCIVEK-treated subjects had cirrhosis at baseline. SVR rates among cirrhotic subjects who received INCIVEK combination treatment compared to Pbo/PR48 were: 84% (48/57) compared to 7% (1/15) for prior relapsers, 34% (11/32) compared to 20% (1/5) for prior partial responders, and 14% (7/50) compared to 10% (1/10) for prior null responders.
Four percent (19/530) of treatment experienced subjects who received INCIVEK combination treatment were Black/African Americans; the SVR rate for these subjects was 63% (12/19) compared to 66% (328/498) for Caucasians.

The complete revised label can be viewed on the FDA web site at Drugs@FDA.

Richard Klein
Office of Special Health Issues
Food and Drug Administration

Kimberly Struble
Division of Antiviral Drug Products
Food and Drug Administration

The Motley Fool takes on universal testing for HCV...

Article posted on 3/16/12 on Motley Fool.com. The Motley Fool's Brian Orelli, Ph.D on the economics of universal testing for HCV. He makes the case that drug companies should leverage public policy to uncover as many potential patients as possible. What Dr. Orelli missed is that every HCV drug development company with skin in the game is already doing that through the Viral Hepatitis Action Coalition. A good read anyway.

Hep C Drugmakers' Best Outcome


By Brian Orelli, PhD

March 16, 2012

Treating hepatitis C is a losing proposition. Unlike treatments for chronic diseases -- high blood pressure or diabetes, for instance -- if a hepatitis C drug does its job, the patient is cured. It's a one-and-done treatment. Since the hepatitis C epidemic peaked many years ago, hepatitis C drugmakers need to find a new source of patients.

A report published in Clinical Infectious Diseases might have the solution: people who are already infected, but don't know it yet.

Current guidelines recommend testing only people who have identified risk factors such as drug use, blood transfusions before blood-bank testing began in 1992, or unexplained liver-function abnormalities, for example -- but that misses a substantial number of infected individuals. Estimates vary, but somewhere between 50% and 75% of people infected with hepatitis C don't know it.

Most probably have the risk factors, but they're unwilling to admit to the drug use, especially if it was years ago, or have forgotten about the blood infusion. Or the doctors aren't asking the right questions to identify the risk factors -- it's a touchy subject, you know.

The solution: Test everyone. You'll get a lot of negative results -- less than 2% of the population is infected -- but you'll catch those who might not have been diagnosed before they progress to serious liver problems.

The researchers plugged everything from costs to cure rates to likelihood of progression of liver disease and a lot of additional parameters into one giant formula and concluded that it would be cost-effective to screen everyone between the age of 20 and 69. Hepatitis C leads to liver cancer and other complications, and eliminating the cost of a liver transplant -- a quarter-of-a-million-dollar procedure -- can make up for a lot of $20 tests.

Sounds good, in theory

One journal article isn't going to change public policy; that will require a recommendation from the Centers for Disease Control and Prevention, which is a slow and methodical process.

If the CDC does institute universal testing for adults, hepatitis C test makers would certainly benefit. Just keep in mind that there's substantial competition out there: Abbott Labs (NYSE: ABT ) , Roche, Siemens, and OraSure Technologies (Nasdaq: OSUR ) all sell hepatitis C tests. They don't disclose margins on individual tests, but considering the number of players involved, I'd have to guess they aren't great.

Drugmakers developing hepatitis C treatments will be the real beneficiaries if more people are diagnosed. With the cost of treatment in the $80,000 range, each new patient is quite valuable.

That is, if they're treated
As the authors of the paper point out, screening is cost-effective -- and makes drugmakers money -- only if the patients who test positive are actually treated. Hepatitis C is a chronic infection that takes years to do any real damage in patients. Unlike cancer, where there's an immediate need for treatment, hepatitis C patients can take their time.

That could mean patients are lost to follow-up. It could also mean patients wait until drugs go off patent and there are cheap generics available before taking the drugs.

Identifying more patients is good, but they're not going to be moneymakers without the help of doctors.

Something companies can control
The cure rate of hepatitis C drugs is one of the factors that determine whether testing is worth the effort. If there were no way to treat patients, identifying infected patients would be only marginally useful.

As it is, Vertex Pharmaceuticals' (Nasdaq: VRTX ) Incivek has increased the standard of care substantially. Roche's Pegasys and Merck's (NYSE: MRK ) Pegintron cure about half of the patients, while adding Incivek increases that to around 70%.

As Gilead Sciences (Nasdaq: GILD ) , Abbott, and others develop better drugs, and we get closer to 100% cure rates, the benefit of testing will increase. It would be nice to have the patients waiting when the second-round of oral medications are approved, but drugmakers might have to get the drugs approved first and then show that identifying additional patients is beneficial.

Original article: The REAL drug to beat in Hepatitis C treatment: Ribavirin

An article I authored and recently published online thanks to the great folks at GastroHep.tv, a multi-media, cutting edge online resource for the Gastroenterology and Hepatology community. 



The REAL Drug to Beat in Treating Hepatitis C: Ribavirin

by Chris Barnes

By now, most of us are aware – some of us painfully so – that the Hepatitis C drug development market is red hot. Investors and developers alike need a scorecard to keep track of who is buying who and for what potential blockbuster drug in the race to make it big in treating Hepatitis C.  All of this hullabaloo is for good reason – the CDC estimates there are over 170 million people infected with Hepatitis C worldwide[1], a vast majority of them don’t know that they have it.  That is paradoxically both an enormous and lucrative problem. This means there are a lot of potential patients for pharmaceutical companies to treat with blockbuster anti-HCV drugs.

The names of the compounds in development are like alphabet soup – GS-7977, VX-222, BMS-790052, BI-201335, TMC 435, BL-8020… protease inhibitors, polymerase inhibitors, cyclophilin inhibitors… the list goes on and on. This is a good thing for both drug makers and patients. Drugs to treat Hepatitis C are becoming more potent and more tolerable.  And the race for the next blockbuster drug means there is no shortage of drugs and drug classes to choose from.  Drug developers may even realize the holy grail of Hepatitis C treatment – an all oral, interferon-free regimen consisting of 2-4 pills a day. That’s right, no shots, no interferon. This would potentially make treatment for Hepatitis C infinitely more tolerable for patients.

So the HCV drug development biz is booming… but the hottest drug to beat in Hepatitis C?  Ribavirin.  A cheap, generic anti-viral. It turns out that even with all the advances drug makers are realizing in interferon-free drug combinations, ribavirin is critical to the success in curing patients of Hepatitis C.   The trouble is that no one is really sure how ribavirin works. All we know is that treatment response rates are infinitely higher when it is part of a Hepatitis C antiviral regimen.[2][3][4]

Researchers are busy trying to find out just what makes ribavirin tick, but let’s look at a few of the current theories on how the drug works:

Ribavirin may cause something called ‘error catastrophe’ in the lifecycle of the HCV virus.[5]Ribavirin is a nucleoside analog – this means that ribavirin can fool the virus into thinking that it’s one of the building blocks needed for the virus to replicate. So when the virus tries to replicate itself, it picks ribavirin as a building block instead of the real thing. This mucks up the replication process leading to ‘error catastrophe’ – in other words, the virus is no longer able to make copies of itself.
Inosine monophosphate dehydrogenase (IMPDH). That’s a tongue-twister to be sure, but it’s also a cellular enzyme the human body makes and the HCV virus needs. Ribavirin may inhibit this enzyme, which consequently shuts down the energy supply the Hepatitis C virus requires to survive and replicate.[1]
The Hepatitis C virus is sneaky. It has a peculiar knack for evading the body’s immune system[2], so anything that might disrupt that ability would be very valuable to an anti-HCV regimen. It turns out that ribavirin may have this unique ability by helping the body mount a specific anti-viral response to the Hepatitis C virus, which is essential in fully clearing the virus. [3]
While ribavirin’s exact mechanism of action remains a mystery, there is one thing we do know for certain – we need ribavirin to fight Hepatitis C. Paring ribavirin with the above new antiviral compounds currently in development – called Direct Acting Antivirals  or DAAs -  that target and disrupt numerous points in the lifecycle of the virus, lead to significantly better cure rates then just using the DAAs alone. While interferon may go the way of the buffalo, it appears that the lowly, unsexy ribavirin is here to stay.  This makes ribavirin the REAL drug to beat in the Hepatitis C drug development marketplace.

References

[1] Perz JF, et al. The contribution of hepatits B virus and hepatitis C virus infections to cirrhosis and primary liver cancer worldwide. J Hepatol 2006; 45: 529-38

[2] Vertex Pharmaceuticals, Inc. (2010)  Vertex adds ribavirin in additional treatment arm in ongoing phase II VX-222 & Telaprevir combo trial. [Press Release] Retrieved from http://viralmatters.blogspot.com/2010/11/vertex-adds-ribavirin-in-additional.html

[3] Hezode, Christopher, et al. (2009) Telaprevir and Peginterferon with or without Ribavirin for chronic HCV Infection. Retrieved from http://www.nejm.org/doi/full/10.1056/NEJMoa0807650

[4] Smith, M. (2012). New Combo KOs HCV Without Interferon, Ribavirin  [Online article] Retrieved from: http://www.medpagetoday.com/InfectiousDisease/Hepatitis/30739

[5] Maag D, et al. RNA virus error catastrophe: direct molecular test by using ribavirin. Proc. Natl. Acad. Sck. 2001; 98: 6895-900

Seeking Alpha: Addressing Vertex/Gilead Confusion...

Posted 3-1-2012 on Seeking Alpha.com: More on HCV drug development investment 'irrational exuberance', the author making a case that investors have given Vertex the bum's rush and should take another look. 

Addressing Vertex / Gilead Confusion
March 1, 2012
Contributor: Prohost Biotech

Hepatitis C virus (HCV) treatments are moving stocks of HCV developers up and down in a chaotic way that makes no sense. While Vertex’ (VRTX) Incivek sales have been breaking the record of drug sales, investors who have been fed immature and unconfirmed knowledge that Pharmasset’s oral HCV therapeutics combination will render Incivek obsolete caused a sell-off in VRTX. Investor logic that patients would definitely prefer all oral drugs over a combination that has injectable alfa interferon is undisputable, that’s we too are waiting for a successful all oral HCV treatment, which has yet to emerge.

With the media stressing that Pharmasset was the firm that will put the magic combination on the market, Pharmasset's stock doubled from over $20 in January 2010, to around $45 at the end of December. In 2011, the stock rallied again from $45 in January to $135 in August, split 2 to 1 and started climbing back from around $66 to $72. The firm was then acquired by Gilead (GILD), which paid an additional 67% premium over its obese market price, i.e., around over $130 per share.

This scenario does not make sense to us. Contrary to the market’s culture, investors, for one reason or another, sold a real present to buy a future designed on mere speculation. They sold VRTX, a company that had a marketed HCV drug, which is the first ever to represent a cure for the life-threatening HCV infection and whose sales have been actually generating record revenues to buy into Pharmasset’s oral combination while still in mid-trial and requires more lengthy experimentation before confirming the all-oral combination’s safety and long-term efficacy.

Just before concluding the acquisition deal, on December 16, 2011, Pharmasset surprisingly announced its decision to discontinue all treatment arms with a regimen containing its drug PSI-938 because of laboratory abnormalities associated with liver function in subjects receiving the drug at a dose of 300 mg/day. This news surprised investors, especially Gilead’s shareholders who began to question the value of the deal with Pharmasset. The news did not alter Gillead’s decision to acquire the company. After the acquisition, Gilead’s stock experienced a temporary retreat. Many investors believed that $11 billion was an unprecedented high amount of money to be paid for molecules that have yet to complete clinical trials, confirming their superiority as described by the media since 2009. Investors’ temporary negative reaction toward the deal was the only understandable action in this story.

It did not take time for GILD to fiercely rebound after the firm announced its financial results. The stock was up to $56, matching its new high for the past three years. Less than two months later, though, other trial results with Pharmasset’s combination on HCV genotype 1 patients with a prior “null” response to an interferon-containing regimen demonstrated that the majority of patients experienced viral relapse within four weeks of completing 12 weeks of treatment with what has become Gilead’s combination of GS-7977 plus ribavirin (RBV). GILD tumbled, trading now at around $45, after loosing around 15% of its value.

In the mean time, Vertex is generating millions of dollars selling its selective HCV protease inhibitor. Its stock, though, remained boxed - sold every time it makes an attempt to rally even though Vertex is also trying its own all-oral combination. The stock remained boxed even after data from two treatment arms of the Phase 2 ZENITH study evaluating an interferon-free (all-oral) treatment regimen of the non-nucleoside polymerase inhibitor VX-222 in combination with INCIVEK (telaprevir) tablets and ribavirin in people with genotype 1a or 1b hepatitis C who were new to treatment have demonstrated promising safety and efficacy and after learning that the data from this study will be used to design a Phase 3 program with the goal of submitting a New Drug Application (NDA) to the FDA for the first interferon-free regimen for genotype 1 (1a and 1b) patients by the end of 2014 or beginning of 2015.

Investors didn’t even bother considering the fact that Vertex and its collaborator Alios BioPharma are conducting Phase 1 studies of two structurally-distinct nucleotide polymerase inhibitors, ALS-2200 and ALS-2158. Vertex has begun the first seven-day viral kinetic studies of ALS-2200 and ALS-2158 in people with genotype 1 hepatitis C, whose safety and viral kinetic data expected in the second quarter of 2012. Positive results would enable the initiation of Phase 2 studies in the second half of 2012 to evaluate multiple interferon-free combination regimens of ALS-2200, ALS-2158, INCIVEK, VX-222 and/or ribavirin.

What continued to make no sense at this stage is that investor pessimism with Gilead's all-oral combination that erased 15% of GILD price, did not transform into optimism for VRTX, which was cremated by the enthusiasm for Gilead’s drug that investors are now experiencing doubt about. It looks as if investors are sensitized to not appreciate the firm that introduced the first HCV cure and the first approved cystic fibrosis drug that works at the root cause of the disease, knowing in fact that Vertex has plans ready to bring breakthrough treatments to all cystic fibrosis patients.

Gilead is a great firm and at the end of the day it will probably succeed in bringing an HCV breakthrough treatment to the market. But this does not mean that Vertex will not succeed reaching the same goal. Vertex is also a great firm that has already changed the way chronic life-threatening diseases have been treated. Gilead has a lot of current and upcoming good news and so does Vertex. The HCV market is huge. It requires more than one, or two treatments to satisfy its needs.

Disclosure: We are long both firms.

HCAB Position Statement: Hepatitis C Drug Development and Drug-Drug Interaction Studies...

This HCAB (Hepatitis C Community Advisory Board) position statement was published on 2/28/12 regarding Hepatitis C drug development and drug-drug interaction (DDI) studies. In short, the HCAB would like drug developers to be more proactive in doing DDI studies before the drugs come to market. They admonish Merck specifically for not doing DDI studies with commonly available antiretrovirals and their HCV antiviral drug, boceprevir. Further, they applaud the efforts of Vertex and J&J for doing full due diligence in DDI studies prior to the launch of Telaprevir. 

HCAB Position Statement: Hepatitis C Drug Development and Drug-Drug Interaction Studies

February 17, 2012 -- The Hepatitis C Community Advisory Board (HCAB) recognizes the value of more effective and less toxic treatment for hepatitis C virus (HCV). We believe that sponsors can conduct key drug-drug interaction (DDI) studies with direct-acting antivirals (DAAs) and other candidates in development and medications commonly used by people with hepatitis C and those coinfected with HIV/HCV prior to their approval, without delaying development of these important therapies.

DAAs may share metabolic pathways with drugs that are commonly used by populations with a high prevalence of hepatitis C, such as hormonal contraceptives, methadone, buprenorphine, lipid-lowering agents, immunosuppressive drugs, herbal remedies, and commonly prescribed psychiatric medications.

In recognition of the suboptimal efficacy and tolerability of [pegylated interferon] and ribavirin, rapid trajectory of liver disease progression, and increasing mortality from HCV-related complications among HIV/HCV coinfected patients, regulators in the US and the EU encourage sponsors to conduct trials in HIV/HCV coinfected patients prior to approval for HCV monoinfection. Sponsors have already opened, or plan to launch these trials.

The recent discovery of drug-drug interactions between boceprevir and boosted HIV protease inhibitors underscores the importance of DDI studies with DAAs. Although we commend the sponsor, Merck, for opening one of the first coinfection trials with a DAA, we were outraged that Merck chose not to conduct DDIs with commonly used antiretroviral agents prior to launching the trial, and prior to gaining approval for boceprevir. Vertex and Tibotec were able to bring telaprevir [Incivek] to market with a much fuller portfolio of DDI data, although both drugs were developed within the same timeframe.

HCAB asks FDA [the US Food and Drug Administration], EMA [European Medicines Agency] and pharmaceutical companies to work together to minimize potential harm to hepatitis C monoinfected and HIV/HCV coinfected patients from uncharacterized drug-drug interactions. Furthermore, we call upon sponsors to perform DDI studies (as indicated by metabolic profile of their drug or drugs) with DHHS [US Department of Health and Human Services], EACS [European AIDS Clinical Society] and WHO [World Health Organization]-recommended antiretroviral agents for first-line, and treatment-experienced HIV/HCV coinfected people prior to approval, and strongly encourage studies of hormonal contraceptives, methadone, buprenorphine, lipid-lowering agents, immunosuppressive drugs, herbal remedies, and commonly prescribed psychiatric medications.

2/28/12

Source

Hepatitis C Community Advisory Board. HCAB Position Statement: Hepatitis C Drug Development and Drug-Drug Interaction Studies. February 16, 2012.

The Motley Fool comments on "The Hepatitis C Bubble"...

Posted 2/29/12 on The Motley Fool.com. Brian Orelli, PhD comments on investor 'irrational exuberance' within HCV drug developer stocks and urges caution. Having been in the pharma and biopharma industry since '93, I'm in Orelli's camp in erring on the side of fiscally conservative. The major of preclinical drugs - and even drugs in phase II development - never make it to market. That's never more been the case than in Hepatitis C drug development. The 'Phase II graveyard' of compounds that will never see the light of day is huge by any standard. 

3 Signs of a Hepatitis C Bubble

By BRIAN ORELLI, PHD, THE MOTLEY FOOL
Posted 9:37PM 02/29/12 Investing
0 CommentsText Size A A A

Gilead Sciences' (NAS: GILD) purchase of Pharmasset and Bristol-Myers Squibb's takeout of Inhibitex threw gasoline on a fire that was already raging.

But higher values in and of themselves don't necessarily mean the indication is in a bubble that's sure to pop. You have to dig a little deeper. Here are three signs the enthusiasm might be getting a little extreme.

Preclinical fever
BioCryst Pharmaceuticals (NAS: BCRX) rose 12% in one day earlier this month after announcing data on its hep C drug, BCX5191. That's not weird -- drugmakers are supposed to go up when they release positive data.

But BCX5191 hasn't even made it into the clinic yet.

Early-stage success does tend to be a better predictor of approvability for hepatitis C drugs than it is for drugs treating other indications, but I'd be very cautious reading too much into the results, especially considering how many drugs are already in the clinic.

Acquisition exuberance
BioLineRx shares more than doubled at one point last month on 675 times the volume the day before apparently because the company licensed a hepatitis C drug BL-8020 from a privately held French biotech, Genoscience.

Did it get such a good deal that the company was instantly worth twice as much? Who knows? The terms of the deal weren't disclosed. It couldn't have been worth that much, though, considering BL-8020 hasn't made it to the clinic either. Then again, see above.

My guess is that investors jumped into BioLineRx because they think having a hepatitis C drug makes the biotech a takeout target. And considering the premiums we've seen thus far, the rewards could be plentiful if they continue.

Trading in tandem
Speaking of acquisition, Idenix Pharmaceuticals (NAS: IDIX) and Achillion Pharmaceuticals (NAS: ACHN) have been long-rumored acquisition targets, especially as Pharmasset and Inhibitex were taken out.

The drugmakers have traded virtually in tandem as investors have treated them identically, expecting both to be the next M&A victor.

But it's not like they have the same pipelines. There's no reason to think they have the same risk-reward profile. Losing perspective of the underlying asset is a sure sign of a bubble.

But will it pop?
There's no doubt there's a bubble: Valuations on hepatitis c drugs are much higher than any other drug. I'm unaware of any biotech without a drug on the market that has a valuation above $11 billion, the price that Gilead paid for Pharmasset.

But whether the bubble will pop is harder to know. I tend to think that investors and companies snapping up the assets will eventually come to the realization that the rewards at these insane levels don't justify the risks.

But it doesn't have to go down like that, I guess. There are a lot of patients infected with the virus who may not be identified and still more who know they're infected and choose to wait for the next generation of medications. And the cost of not ridding the patients of the virus is fairly high - hepatitis C is a leading cause of liver transplants -- so hep C drugmakers can justify fairly high prices.

The drugs could succeed in the clinic and patients could be identified, resulting in billions of dollars in sales and a justification of the high prices.

But even in that rosy picture, not every drug is going to work. And even if it's approved, there's no guarantee it'll actually get prescribed over the rivals. Just look at the competition between Vertex Pharmaceuticals (NAS: VRTX) and Merck, whose drugs launched at nearly the same time, but Incivek has sales five times higher than Victrelis.

Even if the entire hep C drug space doesn't pop, someone is going to be left holding the bag. Be careful out there.

In 2015, Gilead's GS-7977 Plus Ribavirin Will Earn Decision Resources' Proprietary Clinical Gold Standard Status for the Treatment of Non-Responder Patients with Hepatitis C Virus...

Press release posted 2/28/12 on Marketwatch.com. Although their output is always of exceptional high-quality, Decision Resources' ability to pick a 'whip-your-head-right-around, spill-your-coffee-and-read-at-all-costs' attention-grabbing headline in hopes that you'll buy their product, is unprecedented in the market analysis marketplace. That's the type of unexpurgated crassness we'd like to see more of.  You have to love them. Apparently, the oracles at DR have already decided that they will award GS-7977 plus RBV the "Decision Resources' Proprietary Clinical Gold Standard" for treatment of non-responders in 2015. That's some unshakable confidence, let's hope they're right because no one is going to let them forget this press release. Despite the puffery, some interesting analysis is to be gleaned from this press release. They've obviously been doing some serious homework. DR expects that "the overall HCV drug market will experience significant growth, expanding from almost $1.7 billion in 2010 to $14.4 billion in 2015 in the United States, France, Germany, Italy, Spain, the United Kingdom and Japan. Thereafter, the market will decrease to $11.2 billion in 2020, owing to a decline in the size of the treatment-eligible population due to declining prevalence and effective new regimens." Compelling reason enough on why the HCV drug development marketplace is red hot at the moment.  


In 2015, Gilead's GS-7977 Plus Ribavirin Will Earn Decision Resources' Proprietary Clinical Gold Standard Status for the Treatment of Non-Responder Patients with Hepatitis C Virus

* GS-7977 Plus Ribavirin Will Displace the Current Proprietary Clinical Gold Standard, Telaprevir in Combination with Peg-IFNa/Ribavirin, According to Findings from Decision Resources


BURLINGTON, Mass., Feb 28, 2012 (BUSINESS WIRE) -- Decision Resources, one of the world's leading research and advisory firms for pharmaceutical and healthcare issues, finds that, based on clinical data and the opinions of interviewed thought leaders, telaprevir (Vertex's Incivek, Johnson & Johnson's Incivo) in combination with peg-IFNa (Roche's Pegasys or Merck's Victrelis) and ribavirin (Roche's Copegus; Merck's Rebetol; generics) has earned Decision Resources' proprietary clinical gold standard status for the treatment of non-responder patients with hepatitis C virus (HCV). Owing to its competitive advantages in safety and tolerability as well as delivery, the interferon-free combination of Gilead's GS-7977 (formerly PSI-7977) plus ribavirin will displace telaprevir plus peg-IFNa/ribavirin and earn proprietary clinical gold standard status for HCV non-responders in 2015, following its launch for the indication in 2014 in the United States.

Decision Resources' analysis of the hepatitis C virus drug market also finds that surveyed U.S. gastroenterologists and managed care organization (MCO) pharmacy directors agree that the percentage of genotype-1 null responders achieving sustained virologic response is one of the attributes that most influences their decisions regarding prescribing and formulary status determinations, respectively, in HCV non-responders.

"Clinical data and the opinions of interviewed thought leaders indicate that several emerging regimens utilizing novel, HCV-specific direct-acting antivirals have advantages over sales-leading telaprevir plus peg-IFNa/ribavirin on this attribute," said Decision Resources Analyst Seamus Levine-Wilkinson, Ph.D.

According to insights from surveyed U.S. gastroenterologists and MCO pharmacy directors, the absence of interferon-free treatment options for HCV is one of the greatest unmet needs in HCV. Clinical data and the opinions of interviewed thought leaders indicate that GS-7977 has demonstrated the potential to significantly fulfill this unmet need.

The findings also reveal that surveyed U.S. gastroenterologists indicate that they would prescribe the quadruple regimen of Bristol-Myers Squibb's NS5A inhibitor daclatasvir (BMS-790052) plus Bristol-Myers Squibb's protease inhibitor asunaprevir (BMS-650032) plus peg-IFNa/ribavirin to 41 percent of their HCV non-responder patients. Decision Resources' forecast for this quadruple regimen is more conservative due to anticipated reimbursement restrictions, positioning in later lines of therapy, competition from IFN-free regimens and competition asunaprevir will face from other protease inhibitors.

The launch of novel HCV-specific agents will increase the size of the drug-treated population mainly as a result of re-treatment of prior non-responders as well as increased referral and drug treatment rates. The overall HCV drug market will experience significant growth, expanding from almost $1.7 billion in 2010 to $14.4 billion in 2015 in the United States, France, Germany, Italy, Spain, the United Kingdom and Japan. Thereafter, the market will decrease to $11.2 billion in 2020, owing to a decline in the size of the treatment-eligible population due to declining prevalence and effective new regimens.

Decision Resources' Robust Market Forecast and Opportunities Analysis

Decision Resources provides a comprehensive view of what is happening in a specific drug market now and in the decade ahead. The research includes analysis of the unmet need and near-term drug development opportunities that exist within a drug market powered by primary research from physicians and payers. The robust market forecast and opportunities analysis is comprised of the Pharmacor 2012 advisory service and the DecisionBase 2012 report series.

About Decision Resources

Decision Resources ( www.decisionresources.com ) is a world leader in market research publications, advisory services and consulting designed to help clients shape strategy, allocate resources and master their chosen markets. Decision Resources is a Decision Resources Group company.

About Decision Resources Group

Decision Resources Group is a cohesive portfolio of companies that offers best-in-class, high-value information and insights on important sectors of the healthcare industry. Clients rely on this analysis and data to make informed decisions. Please visit Decision Resources Group at www.DecisionResourcesGroup.com .

All company, brand, or product names contained in this document may be trademarks or registered trademarks of their respective holders.

SOURCE: Decision Resources

     
        Decision Resources
        Christopher Comfort, 781-993-2597
        ccomfort@dresources.com

Vertex beats analyst expectations in Q4 2011...

Posted 2/2/12 on the CBS Moneywatch website. Vertex reports a profit of 74 cents a share, beating analysts forecasts on EPS by a couple o' pennies. Doing the math - Q4 2010, - 90 cents a share. Q4 2011 + 74 cents a share. That is remarkable.

Vertex posts 4Q profit on growing Incivek sales

CAMBRIDGE, Mass. — Drugmaker Vertex Pharmaceuticals Inc. said Thursday it turned a profit in the fourth quarter on sales of its hepatitis C pill Incivek, which was approved in May.

Vertex reported a profit of $158.6 million, or 74 cents per share. In the fourth quarter of 2010 it lost $180.4 million, or 90 cents per share. Its revenue surged to $563.3 million from $65.5 million a year earlier. That total included $456.8 million in Incivek revenue, and a $65 million milestone payment from Mitsubishi Tanabe Pharma, which is marketing the drug in Japan.

Analysts were forecasting a profit of 72 cents per share and $518.2 million in revenue, according to estimates compiled by FactSet.
The Food and Drug Administration approved Incivek in May, and Vertex reported $420 million in sales of the drug during the third quarter. Incivek and Merck and Co.'s drug Victrelis were the first breakthrough hepatitis C treatments approved in about 20 years, but other drug companies are developing treatments that have shown higher cure rates in studies so far than Victrelis and Incivek, and which might allow for simpler treatment regimens.
Hepatitis C is a chronic infection that can cause liver damage, cirrhosis, liver failure, or cancer. About 4 million Americans are believed to have the virus, and drug companies and analysts expect strong sales of hepatitis C drugs as the baby boom generation ages, more cases are diagnosed, and treatments improve. The virus is the main cause of liver transplants in the United States.
On Wednesday regulators approved Vertex's drug Kalydeco, a treatment for cystic fibrosis. The disease causes thick mucus buildup in the lungs. Vertex is also studying other treatments for hepatitis C, cystic fibrosis, inflammatory diseases, and epilepsy.
In 2011 Vertex posted a profit of $29.6 million, or 14 cents per share, after taking a loss of $754.6 million, or $3.77 per share, in 2010. Its revenue rose to $1.41 billion from $143.4 million.
Vertex Pharmaceuticals stock gained 55 cents to $38.38 in Thursday trading, and rose $1.62, or 4.2 percent, to $40 aftermarket.

'The Street' on the decline of Incivek...

Posted today on The Street.com . The author believes that Incivek's sales may have peaked in the 4th quarter of 2011 at lower-than-forecasted sales numbers. This may be due to a new 'watch and wait' period as providers hold off treatment for those that they feel can wait for the 2nd generation of HCV DAA drugs which hold promise for improved tolerability and dosing schedules. Also contributing to the negative slope are those that have treated HCV patients with Incivek and found that managing patients was more hands on than they had anticipated and those providers that may have been inclined to treat, but were turned off to doing so as negative rumors circulated. Economic issues may play a factor here as well - reimbursement rates for HCV care are less-than-ideal, formulary access is spotty and the cost of treating with Telaprevir is a head-spinning sum.

Vertex Hep C Sales Growth Nears End
By Adam Feuerstein

CAMBRIDGE, Mass. (TheStreet) --Vertex Pharmaceuticals'(VRTX_) fourth-quarter earnings report Thursday may represent the high-water sales mark for the hepatitis C drug Incivek -- with prescriptions already declining just seven months after launch.

Current consensus estimate for fourth-quarter 2011 Incivek sales is $483 million, down from more than $500 million earlier this month.

If Vertex meets lowered sales expectations, Incivek will still deliver its best-ever quarter. After that, Incivek sales in the current quarter and through the rest of 2012 are expected to flatten out, perhaps fall, as doctors slow their use of the drug. Hepatitis C patients who can afford to delay treatment may wait for the arrival of new, all-oral regimens expected in 2013-2014.

Before anyone throws a pity party for Vertex, some perspective is in order. Incivek, even with flat prescriptions and sales, is still a cash-generating machine for Vertex. The drug is on pace to record close to $1 billion in sales in 2011 -- amazing since it was only approved on May 23.

In 2012, Incivek will deliver sales around $2 billion, according to the most current consensus estimate. [Vertex has not yet provided 2012 sales guidance but may do so on Thursday.] The only reason that's bad is because many investors on Wall Street tend to value quarter-over-quarter sales growth over everything else. An Incivek year with flattish sequential revenue, even if that revenue totals $2 billion, just doesn't ring the bell for many institutional investors.

Vertex shares at $34.74 are up 5% since the start of the year but are down 40% from their peak right before Incivek was approved last May. That's investors baking in Incivek's relatively short revenue stream. The worst is expected so if Incivek outperforms lowered forecasts or if competing next-generation Hep C drugs from Gilead Sciences or Bristol-Myers Squibb falter, Vertex could very easily rebound in a big way.

Vertex is not ceding the race to develop an all-oral Hep C regimen to its rivals. Later this quarter, Vertex will announce early cure rates from a phase II study of triple therapy that combines Incivek, the experimental pill VX-222 and ribavirin. In the second quarter, the company will release the first proof-of-concept data on two Hep C "nucs" licensed from Alios Biopharma.

Vertex stock falls as Leerink Swann reduces sales forecast for Telaprevir...

Posted on Business Week today. Leerink Swann analyst cut his sales forecast for Telaprevir by 35% and target share price from $66 to $48 based on the current hyper-aggressive development space  for interferon-free therapy. It was only a matter of time once Pharmasset launched their broadside at AASLD 2011. This is a ground-breaking product, but burdened with a sharply curtailed life cycle.

Vertex Falls as Analyst Cuts Hep C Sales Estimate: Boston Mover
January 30, 2012, 6:40 PM EST
By Drew Armstrong

Jan. 30 (Bloomberg) -- Vertex Pharmaceuticals Inc. fell the most in seven weeks after an analyst with Leerink Swann & Co. cut sales estimates for a hepatitis C pill made by the company that was approved by U.S. regulators last year.
Vertex’s Incivek, among the first new hepatitis C drugs to reach the market in almost a decade, may be eclipsed by new pill-only treatments with fewer side effects and shorter courses of treatment. Incivek is given with interferon, an injected medicine. Merck & Co.’s similar pill, Victrelis, was also approved last year.
Shares of Cambridge, Massachusetts-based Vertex fell 3.5 percent to $34.74 at the close in New York, their biggest one- day drop since Dec. 8.
Howard Liang, an analyst with Leerink Swann in Boston, reduced his sales forecast for Incivek by 35 percent from $2.3 billion this year to $1.5 billion. Liang also cut his target price for Vertex shares from $66 to $48.
“In light of recent development of interferon-free regimens and likely more aggressive development as a result of recent transactions in the space, we are further curtailing the Incivek tail,” Liang said in a note to clients today.
Vertex had $420 million in revenue from Incivek in the third quarter of 2011. Revenue from the drug accounts for 64 percent of the company’s sales.
--Editors: Angela Zimm, Adriel Bettelheim
To contact the reporter on this story: Drew Armstrong in Washington at darmstrong17@bloomberg.net;
To contact the editor responsible for this story: Reg Gale at rgale5@bloomberg.net

Top Hepatitis C Virus Biotech Picks By The World's Largest Fund Managers

Recently posted on the Seeking Alpha.com financial website on who fund managers like in the HCV drug development space. In general, fund managers are bullish like Idenix, Dynavax and Peregrine but the currently bears run wild for Vertex, Achillion and Merck. Good quick rundown of what each company specializes in and where they're HCV compounds are in terms of development and partnerships. 

The announcement by Bristol-Myers Squibb (BMY), just over two weeks ago, on January 7th, of an agreement to buy Inhibitex (INHX) for $2.5 billion at a massive buyout premium of over 160%, has ignited a rally among biotech companies that are currently active in developing products targeting hepatitis C virus (HCV). In this article, we examine based on our research of their latest available Q3 institutional 13-F filings, the investment activities of the world's largest funds or mega funds among a dozen pharmaceutical and biotech companies that are active in the HCV space.

These mega fund managers hold between $100 billion and over a trillion dollars in assets, such as Fidelity Investments, Goldman Sachs, and Vanguard Group, and together they control almost a third of the assets invested in the U.S. equity markets, but number just over 30 out of the tens of thousands of funds that invest in the U.S. equity markets. Individually, and collectively, they pack enough firepower to move stocks based on their trading activities.

Taken together, these mega managers were bullish on the group, adding a net $427 million in Q3 to their prior $178.84 billion prior quarter holdings in the group. However, taking out the big pharmaceutical companies, mega funds still added a net $530 million in Q3 to their $47.46 billion prior quarter position among the biotech companies that are active in the HCV field. (for more general information on these mega funds, please look at the end of the article).

The following are the HCV group companies that mega fund managers are bullish about (see Table):

Idenix Pharmaceuticals (IDIX): IDIX engages in the discovery and development of drugs for the treatment of human viral and other infectious diseases, including a focus on hepatitis C virus, hepatitis B virus (HBV), human immunodeficiency virus (HIV) type-1, and acquired immune deficiency syndrome (AIDS). Mega funds added a net $45 million in Q3 to their $380 million prior quarter position, and together they hold 29.7% of the outstanding shares, higher than their 26.3% weighting in the group. The top mega fund buyers in Q3 was by Fidelity Investments ($50 million), and the top holders were Fidelity Investments ($131 million), T Rowe Price ($114 million) and Vanguard Group ($50 million).

IDIX shares have mounted a strong rally recently, up more than 100% in the past twelve trading days, benefiting from both the January 9th announcement of the acquisition of rival INHX by BMY that has ignited a rally in the group, as well as positive interim phase 2b clinical trial data on its HCV Nucleotide Inhibitor, IDIX 184, that was released the same day by the company.

Dynavax Technologies (DVAX): DVAX is a clinical-stage biotech company that is engaged in the discovery and development of novel products to prevent and treat infectious and inflammatory diseases. Its lead clinical stage product candidate is HEPLISAV™, a phase 3 investigational adult hepatitis B vaccine designed to provide protection with fewer doses than current licensed vaccines. In addition it has early stage product candidates, including a universal flu vaccine in phase 1, TLR inhibitor for lupus in phase 1, and then hepatitis B and hepatitis C therapies, also in phase 1 development.

Mega funds added a net $7 million in Q3 to their $102 million prior quarter position, and taken together they hold 25.8% of outstanding shares. The top mega fund buyers were Fidelity Investments ($3.3 million) and Bank of America Corp. ($1.6 million), and the top holder by far was also Fidelity Investments ($64 million). DVAX is currently engaged in preparing to submit its first Biologics License Application (BLA) for HEPLISAV™ Hepatitis B Vaccine to the FDA in the first quarter of 2012, followed soon by a submission of Marketing Authorization Application (MAA) for European approval.

Peregrine Pharmaceuticals (PPHM): PPHM is a clinical-stage biotech company developing and manufacturing innovative monoclonal antibody therapeutics to treat cancers and viral infections such as hepatitis C virus. In the hepatitis C space, the company is evaluating bavituximab combined with ribavirin in a randomized phase 2 trials in treatment native patients with genotype-1 HCV infection. Earlier, the company released preliminary phase 2 trial results from this study on December 29th last year that showed antiviral activity and a positive safety profile, with patients reporting fewer side effects than in the interferon-containing arm. Mega funds added a net $1 million in Q3 to their $8 million prior quarter position, and taken together mega funds hold 11.4% of the outstanding shares, with the top holders at the end of Q3 being Barclays Global Investors ($2.7 million) and Blackrock ($1.7 million).

The following are the HCV group companies that mega fund manager are most bearish about (see Table):

Vertex Pharmaceuticals (VRTX): VRTX engages in the discovery, development, and commercialization of small molecule drugs for the treatment of hepatitis C, cystic fibrosis, epilepsy and other life-threatening diseases. It has two FDA-approved drugs, INCIVEKTM for treat chronic hepatitis C genotype-1 infection in adults with stable liver problems, who have not been treated before or who have failed previous treatments, and Lexiva for HIV that it co-discovered with GlaxoSmithKline (GSK).

It has five other drugs in clinical development, including VX-222 in phase 2 development for hepatitis C, VX-765 in phase 2 development for epilepsy, VX-509 in phase 2 development for immune-mediated inflammatory disease, and VX-770 and VX-809 in phase 3 and phase 2 development respectively for Cystic Fibrosis. Mega funds cut a net $110 million in Q3 form their $3.89 billion prior quarter position. The top sellers were Fidelity Investments ($91 million) and T Rowe Price ($34 million), and the top holders were Fidelity Investments ($966 million) and Capital World Investors ($653 million).

Achillion Pharmaceutical (ACHN): ACHN is a clinical-stage biotech focused on developing new treatments to patients with infectious diseases, including HCV and resistant bacterial infections. It currently has five compounds in various stages of clinical development targeting HCV, including one in phase 2, two in phase 1 and two others in pre-clinical development. Mega funds cut a net $6 million from their $280 million prior quarter position, with the top seller being Bank of New York Mellon Corp. ($18 million), and the top holder being Fidelity Investments ($111 million). ACHN shares rallied strongly after the announcement of the INHX acquisition by BMY, up over 50% in the five trading days after the January 7th announcement; while they have given back part of their gains, they are still up over 35% on the news.

Inhibitex Inc. and Bristol-Myers Squibb Co.: INHX, a developer of differentiated anti-infective products to prevent and treat serious viral and bacterial infections, including primarily shingles and chronic infections caused by hepatitis C virus, is under agreement to be acquired by BMY, a developer of branded pharmaceuticals for the treatment of cardiovascular, virological and other infectious diseases. Mega funds cut $28 million in Q3 from a $512 million prior quarter position in INHX, and they added a net $711 million to their $20.51 billion prior quarter position in BMY.

Other pharmaceutical and biotech companies that are players in the HCV space that mega funds are bearish on (see Table) include Gilead Sciences Inc. (GILD), that has multiple product candidates in phase 1 and phase 2 trials targeting hepatitis C, in which mega funds cut a net $306 million in Q3 from their $17.68 billion prior quarter position, and Abbott Laboratories (ABT), that has a product candidate in phase 2 clinical trials for HCV in collaboration with Enanta Pharmaceuticals, in which mega funds cut a net $16 million in Q3 from their $26.63 billion prior quarter position.

Also, additional HCV players that mega funds are bullish about include Merck & Co. (MRK), that has an FDA-approved product Victrelis for HCV in the market, and several in phase 2 and 3 development for hepatitis B and C, in which mega funds added a net $530 million to their $47.46 billion prior quarter position; and Pfizer Inc. (PFE), that has a compound in phase 2 development for HCV, in which mega funds added a net $60 million to their $54.03 billion prior quarter position. Furthermore, mega funds have a $1 million position, unchanged in Q3, in Inovio Pharmaceuticals (INO), that has compounds in phase 2 and preclinical development targeting HCV.

General Methodology and Background Information: The latest available institutional 13-F filings of over 30+ mega hedge fund and mutual fund managers were analyzed to determine their capital allocation among different industry groupings, and to determine their favorite picks and pans in each group. These mega fund managers number less than one percent of all funds and yet they control almost half of the U.S. equity discretionary fund assets. The argument is that mega institutional investors have the resources and the access to information, knowledge and expertise to conduct extensive due diligence in informing their investment decisions. When mega Institutional Investors invest and maybe even converge on a specific investment idea, the idea deserves consideration for further investigation. The savvy investor may then leverage this information either as a starting point to conduct his own due diligence.

Credit: Historical fundamentals including operating metrics and stock ownership information were derived using SEC filings data, I-Metrix® by Edgar Online®, Zacks Investment Research, Thomson Reuters and Briefing.com. The information and data is believed to be accurate, but no guarantees or representations are made.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

Disclaimer: Material presented here is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion. Further, these are our 'opinions' and we may be wrong. We may have positions in securities mentioned in this article. You should take this into consideration before acting on any advice given in this article. If this makes you uncomfortable, then do not listen to our thoughts and opinions. The contents of this article do not take into consideration your individual investment objectives so consult with your own financial adviser before making an investment decision. Investing includes certain risks including loss of principal.

FierceBiotech interviews out-going Vertex CEO Matt Emmens and successor Jeffrey Leiden...

An interview with out-going CEO and successor to the throne, Jeffrey Leiden. Emmens appears to be jumping ship at a good time, with a record-breaking 3rd quarter with sales of it's HCV protease inhibitor incivek. Initial 4th quarter sales aren't living up to expectations, however. This may in part be due to the release of promising data hinting at interferon-free treatment for some patients in the next couple of years, reports of higher-than-anticipated anemia, DRESS and Stevens-Johnson syndrome driving providers and patients to use competitor Victrelis or simply taking a chance and waiting for more tolerable therapies. Successor Dr. Leiden faces an uphill battle as Vertex struggles to manage investor, patient and provider expectations as well as the prodigious problem of filling a considerable commercial gap in it's pipeline.

Interview: Vertex CEO concerned about investors' 'hyper-focus' on hep C
December 21, 2011 — 9:37am ET | By Ryan McBride

Matthew Emmens


On the heels of Vertex Pharmaceuticals' ($VRTX) big news last week about changing CEOs next year, FierceBiotech chatted with both current chief executive Matt Emmens (picture, top) and his successor Dr. Jeffrey Leiden. Both Emmens and Leiden are heavyweights in the biopharma industry, with hugely successful drug launches under their belts.

Still, Vertex needs another hit to follow the successful approval and launch of its hepatitis C drug Incivek this year, and it could have one in the experimental cystic fibrosis drug Kalydeco now under FDA review. Much of the company's stock growth of recent years has wilted over the past 6 months on fears that Incivek faces lots of competition in the years ahead from Merck's ($MRK) rival drug and interferon-free treatments against hep C in development, which analysts believe could rapidly eat into Vertex's Incivek business if approved.


Emmens, a 60-year-old biopharma veteran who headed Shire ($SHPGY) prior taking over as CEO of Vertex in 2009, is handing over his chief executive duties to Dr. Leiden on Feb. 1 and will serve as executive chairman until May. Leiden, 56, has served on the board of Vertex since 2009, and he made a name for himself in past leadership roles at Abbott Labs ($ABT), where he oversaw the launch of the blockbuster rheumatoid arthritis drug Humira.

Here's an edited version of FierceBiotech's conversation with Emmens and Leiden on Tuesday:

FierceBiotech: What has been your biggest mistake as CEO of Vertex?

Emmens: You ask tough questions, you know that [laughing]. I don't see any mistakes. I don't know if I'd do anything different. People are going to second-guess a lot of things. But when you look retrospectively at things, without all the information, that's easy to do. When you're there, the decisions that you have to make at the time have quite a different face on them. I don't think I would have done anything differently knowing what I knew then. Knowing what I know now, yeah, in the drug industry I think I would have gone back and bought Genentech when it was three people.

FierceBiotech: What's your biggest concern about Vertex's business heading into 2012?

Emmens: My biggest concern is the way it's perceived by some in the investment community. I think you have a company here that has the best pipeline that I've ever seen in any company in terms of numbers of projects that are successfully proven in man and in a time frame that's not 15 years out. You see, basically, 8 projects here that could all be on the market by [2017], and you see three or four that could be on the market by [2015]. That's very nice, I think. The hyper-focus on hepatitis C has taken people's focus away from that. And I think on top of that, in hepatitis C, we've got a number of projects that could put us in an all-oral regimen in the time frame of [2014]. That's being overlooked.

FierceBiotech: Do you see yourself being a biopharma CEO again after you leave your executive role at Vertex in May?

Emmens: No. I've been working since I was 11 years old. I retired once from Shire, as you probably know. I was on the board here at Vertex and I saw a unique opportunity to use my skill set at a time that the company needed it. I would not be willing to do that for the long term again. I'll be happy to be on boards and advise and help people who are earlier in their career be successful.

FierceBiotech: According to an online poll, lots of people believe that you are the best CEO in biotech this year. Do you agree with them?

Emmens: They were obviously deluded [laughing]. I thank those who voted and it's a nice honor but I have no idea whether I agree with them or not. I did the best I could, and I try to do the best job I can everywhere I've been. And I came here to help the company along into the commercial realm and be successful, and that's happened.

[FierceBiotech's Q&As with Leiden]

FierceBiotech: What's one meaningful change that you plan to bring to Vertex as CEO?

Leiden: I've been very involved in the strategy that Matt and the team have crafted on the management side and the board side. I'm very supportive of that strategy, and I don't anticipate any major changes to it.

FierceBiotech: Did you have any doubts about whether you should take the CEO job?

Leiden: There's no question that Matt is leaving some big shoes to fill, and, frankly, so did Josh Boger. There have been two fantastic CEOs of this company. So that's always a challenge. On the other hand, I see the opportunities at Vertex looking forward are just fantastic. I've had the good fortune to look at a number of biotech and pharma CEO jobs over the last 5 or 6 years, and this was absolutely a unique opportunity because of the pipeline, the team and the proven record of execution here. The job now is to come here and execute over and over, just like they executed on [Incivek and Kalydeco].

FierceBiotech: As a physician and scientist by training, do you see yourself getting more involved in R&D than Matt has been as CEO?

Leiden: I really see my job as integrating the R&D-scientific-medical function with the commercial function. It's what I did at Abbott and I think it made a difference at Abbott. One of the problems that biopharmas have had is a disconnect between the discovery organization, which first makes the molecules, the development organization, which takes it through human trials to approval, and the commercial organization, which obviously brings [a treatment] to patients and the market. The discovery organization makes drugs that are difficult to develop. The development organization develops them in a way that makes it difficult to sell them. So the real key to the success of a modern-day biotech company is a highly integrated organization.

FierceBiotech: Does Vertex spend enough money on R&D, or too little, to keep growing?

Leiden: I've never seen an R&D organization spend as relatively little money and produce so much. The key metric at Vertex is to look at the productivity per dollars spent, and I would hold that up against any company out there--Pfizer, Merck or Genentech. We're spending an 8th to a 10th of what most of the Big Pharmas are spending and producing more.



Read more: Interview: Vertex CEO concerned about investors' 'hyper-focus' on hep C - FierceBiotech http://www.fiercebiotech.com/story/interview-vertex-ceo-concerned-about-investors-hyper-focus-hep-c/2011-12-21#ixzz1hESYZiaF
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Xconomy.com: The Hepatitis C Market: Biotech’s Version of the Daytona 500

National Biotech Editor of Xconomy, Luke Timmerman likens the current HCV market to Daytona 500 vs a toe-to-toe slug fest between two competitors. Surprises lurk at every turn as a wide array of competitors, from Big Pharma to little Biotech upstarts vie to out-maneuver each other for the championship. This makes for trecherous ground for investors, as we know anything can happen and usually does in drug development. But for the patient suffering from HCV, all this is good news. Intense competition usually sparks innovation - we've already seen from the recent AASLD meeting that a possible all-oral regimen for HCV without the need for interferon may be a distinct possibility for some patients. possibly within 5 years. A good read whether you're an investor, treater or a patient.


Biotech rivalries are sometimes a bit like boxing matches, where you have two lone fighters vying for the prize. But the hepatitis C market is turning into a battle royal that’s more wide open and unpredictable, with all the competitive maneuvering, surprise crashes, and comebacks you might expect from the Daytona 500.

The medical advances in hepatitis C have been dizzying this year, especially in what it means in terms of multi-billion dollar business implications. The safest thing to say is that there’s plenty of good news for patients this year, but that shareholders in the major hepatitis C drug developers had better hold on tight as a new standard of care gets established.

Some commentators figured that Gilead Sciences (NASDAQ: GILD), the world’s biggest maker of HIV drugs, had essentially locked up the dominant position in this new drug class through its $11 billion acquisition last month of Princeton, NJ-based Pharmasset (NASDAQ: VRUS). But it’s still too soon for anyone to declare victory over the wily and fast-mutating virus that causes hepatitis C. Given the way drug development is going now, it’s possible we could have dueling antiviral drug cocktails that cure almost 100 percent of patients within five years. And before we get there, we’re going to see some fascinating chess moves—and probably a few surprising collaborations—from companies like Vertex Pharmaceuticals, Merck, Roche, Johnson & Johnson, Bristol-Myers Squibb, and Abbott Laboratories, as well as several smaller biotech startups like Alpharetta, GA-based Inhibitex (NASDAQ: INHX).

The Pharmasset compound that prompted Gilead to write such a big check, PSI-7977, is “certainly not a panacea, not the lone answer,” says Kleanthis Xanthopoulos, the CEO of San Diego-based Regulus Therapeutics, and the co-founder of another hepatitis C drug developer, Anadys Pharmaceuticals.


Regulus Therapeutics CEO Kleanthis Xanthopoulos

Xanthopoulos says Gilead was “taken to the cleaners,” and that the hepatitis C market is still up for grabs. “It’s going to take some time before people figure out how it plays out,” he says. The Pharmasset drug “is a powerful player, but you will need other direct-acting antivirals. You want to go to a 100 percent cure rate. I can guarantee the Pharmasset compound isn’t going to do it alone.”

Hepatitis C has never really captured big headlines in the U.S., as it has never benefitted from massive awareness boosting campaigns that have supported research for, say, HIV, or breast cancer. But hepatitis C has clearly emerged as one of the biggest opportunities in pharmaceuticals over the past few years. There are more than 3 million people in the U.S., and an estimated 170 million worldwide, with this liver infection that can lead to cirrhosis and liver cancer. Most people have never bothered to get treated, partly because the infection takes years to fully wreak havoc. The other reason is the standard of care with a combination of drugs—pegylated interferon alpha and ribavirin—causes flu-like symptoms that last for almost a year, and usually cures only 30-40 percent of patients. Essentially, most people figure the treatment is worse than the disease.

Vertex Pharmaceuticals changed the equation back in May. The company won FDA approval for a direct antiviral drug, a protease inhibitor called telaprevir (Incivek), that is added to the usual two-drug combo regimen. By adding the Vertex drug, researchers saw the cure rate boom to almost 80 percent of patients, while cutting the treatment time with the other drugs in half. The Vertex drug also significantly raised the cure rate for patients who failed to respond to prior rounds of therapy.

Vertex looked golden for a while, as its stock soared above $55 a share, sending its market value above $10 billion. Analysts were raving about how Vertex smashed sales expectations in its first few months on the market, and started turning profitable in just its second quarter of selling the drug. Waves of patients were suddenly showing up at doctors’ offices to get treatment for hepatitis C, now that the odds of a cure were so much higher.

But important as the Vertex advance has been, researchers have made it clear that this story isn’t over. The ultimate goal is to get rid of interferon, and its side effects, so that physicians can count on some combination of direct antivirals that can be taken as oral pills. That might include Vertex’s drug in combination with others, or might not.

So that’s why Vertex, and other companies, have feverishly been looking to mix and match various hepatitis C drugs. It’s all part of a quest to come up with the ideal combo that can raise the bar on cure rates, minimize side effects, and maximize convenience.

While people on Wall Street like to embrace a simple storyline with clear winners and losers, the hepatitis C virus is one tricky adversary. Like HIV, it has a tendency to mutate and develop resistance capabilities, whenever scientists throw a new antiviral drug against it. So there isn’t likely to be a single magic bullet. The most likely route to success is with a combination of two, three, or maybe four antiviral drugs that attack the virus from different angles, making it much harder for the bug to mutate and escape one drug.

As Steve Worland, the CEO of San Diego-based Anadys Pharmaceuticals, put it in a guest editorial for Xconomy in September, there are at least four important categories of hepatitis C antivirals. There are protease inhibitors on the market like Vertex’s drug and Merck’s boceprevir (Victrelis). There are nucleotide polymerase inhibitors like Pharmasset’s PSI-7977 and a rival drug called mericitabine from Roche. There are non-nucleotide polymerase inhibitors in the works from Abbott Laboratories, Vertex, and Anadys (which Roche acquired this fall for $230 million.) And Bristol-Myers Squibb is betting on another kind of compound, an NS5A inhibitor. (You could also count microRNA therapies, which Santaris Pharma and Regulus are working on at earlier stages of development.)

Just this year, we’ve seen some fascinating jockeying for position. Drug companies often don’t like to test combinations of experimental drugs together in clinical trials, because when side effects emerge, people often like to point the finger at the other guy’s drug. And who wants to divvy up the profits with some other pharma giant when you have the whole thing yourself?

But with hepatitis C, the market opportunity is so big, and the variety of drugs to attack it is so broad, that pharma companies have set aside those concerns just to get a piece of the action. We’ve already seen Merck and Roche form a partnership to co-market Victrelis against the leading drug on the market from Vertex. Gilead just shelled out the breathtaking sum of $11 billion for Pharmasset, even though the smaller company’s lead compound still has to navigate the third and final phase of clinical trials required for FDA approval. Bristol-Myers Squibb and Johnson & Johnson have teamed up in an interesting new collaboration. Roche, through internal efforts and acquisitions, has sought to put all the pieces of the puzzle together under one roof—a protease inhibitor, a nucleotide polymerase inhibitor, a non-nucleotide polymerase inhibitor.

Nobody knows which compounds will match up best together, which ones will be too toxic in combination, or even how many antivirals will be needed to raise the cure rate. But it’s worth noting that Vertex raised the bar very high, by getting cure rates up to around 80 percent. Doctors are certainly eager to get rid of the nasty interferon part of the regimen, but they will only do that when a new regimen can do at least as well on cure rates. And any of these drugs can be derailed by somewhat mild side effects, since the bar on safety is set quite high already.

It might be relatively safe and simple to declare Gilead/Pharmasset the winners in this market, but this race isn’t even close to over. There are 200 laps in the Daytona 500, and in the hepatitis C race, I’d say we’re at about lap 50. There are going to be some fascinating strategic maneuvers, and maybe even a spectacular crash or two, before somebody zooms in under the checkered flag.



Luke Timmerman is the National Biotech Editor of Xconomy, and the Editor of Xconomy Seattle. E-mail him at ltimmerman@xconomy.com or follow him on Twitter at twitter.com/ldtimmerman